The Panic of 1873

A year ago this week, Occupy Wall Street began as a relatively small protest in a park in New York City’s Wall St. Area. It is now an international movement that stands against financial greed and the “corrosive power” of major banks they feel led to our recent economic collapse.

A place not unaccustomed to financial panic and discord, Wall Street was also one of the earliest areas hit in the beginning of the original Great Depression in 1873. That year, the New York Stock Exchange was forced to close its doors for the very first time on September 20 during what was known as the Panic of 1873.

Much like our most recent economic disaster, the Panic of 1873 was sparked by the collapse of a large financial institution: Jay Cooke & Company, a brokerage firm and a major investor in railroad construction. Their failure led to a chain reaction and the country suffered economic despair for years, resulting in history’s worst financial crisis until the second Great Depression came along in the 1930’s.

The Dinner Table Bargain

On June 20, 1790 in New York City, US forefather Thomas Jefferson held one of the most significant and pivotal dinner parties of the century. In attendance were James Madison, Alexander Hamilton and then president, George Washington.

The discussion at hand involved both Hamilton’s longing to standardize the nation’s accounts including a federal assumption of all state debts, estimated at about $80 million, and James Madison’s concern over the potential final location of the nation’s capital. As a Virginian, Madison feared his state would lose influence if the capital were to be placed in the North.

Madison had openly fought Hamilton’s plan, so Jefferson offered to bring the men together to talk over the situation. Known as the Dinner Table Bargain, this meeting of the minds led to the Compromise of 1790. By the end of the evening, the men reached an agreement: Hamilton would support the Potomac site for the new capital and Madison would no longer block assumption in Congress.

Years later, Jefferson would claim that he had been tricked into the evening’s agreement by Hamilton. A blow that was surely softened when in 1801, he took office as the first president in the new city on the Potomac River known as Washington.

Wall Street Walks Tour: Atop the Steps of Federal Hall

One of the stops on each Wall Street Walks guided walking tour is 26 Wall Street, now known as Federal Hall. This location has been an important site in the history of the United States from the very beginning, and in later blog posts we will discuss all that has transpired here. The U.S. Capitol building once stood on this site, back when New York City was the capitol of the United States. That building was later demolished and the New York Customs House was built on the site.
Here, tour guide Annaline Dinkelmann speaks to her tour group on the very same spot that many newscasters use when reporting on the goings-on of Wall Street. The elevation of the steps, and the NYSE in the background, make for a perfect spot to discuss the intricacies of Wall Street.
To learn more about the history of Wall Street, click through and buy a ticket to a Wall Street Walks guided tour.